A sheer drop in the area dedicated to new timber plantations is threatening thousands of Victorian jobs already targeted by an emboldened environmental movement.
The timber industry is warning that plantings in Victoria plummeted in 2009 after the collapses of Great Southern and Timbercorp, which attracted investors to plantations through a series of managed investment schemes (MIS).
Only 2950 hectares of new plantations were established in 2009, down more than 70 per cent from the 10,230 hectares planted in 2008. The situation has not improved in 2010, according to the Victorian Association of Forest Industries (VAFI).
The trees are mainly 10-12-year hardwood plantings for woodchips. None are for hardwood sawlogs, which require at least 25 years to grow to reasonable quality.
The industry’s struggle to recover is exacerbated by an assault from environmental groups invigorated by their victory in Tasmania, where they forced timber giant Gunns to end logging of native forests. They have now set their sights on Victoria.
Wilderness Society forest campaigner Luke Chamberlain said new business models were needed so that plantations could replace native logging.
Mr Chamberlain said most of what was logged out of the native forest was used for woodchips, and the appearance-grade furniture wood could eventually be grown in plantations. The society was willing to delay the end of native logging until those trees could mature, he said.
However, VAFI chief executive Philip Dalidakis said existing plantation production could not replace native logs that were used for housing construction and furniture. He said demand for those products remained high.
According to VAFI’s Sustainability Report 2010, 72 per cent of hardwood sawlogs are processed into value-added products such as windows and doors, flooring, furniture and structural products.
”If we are not prepared to support a scheme to increase plantation development or support harvesting native forest, the question has to be where are we going to get that resource?”
The Wilderness Society says there are only 1200 jobs directly related to the Victorian native logging industry, but Mr Dalidakis said 10,000 country jobs would be lost if the industry stopped harvesting native timber. Unless new pulpwood plantations were planted soon, the losses would be ”hard to quantify”.
”Should there be no market incentives or government policy that supports replanting existing plantations, you could comfortably say that you are probably risking the majority of the plantation industry.”
Australian Forest Growers chief executive Warwick Ragg said that sawlog plantations could replace some of the native logging in the long term. But he said following the collapse of Victoria’s two biggest managed investment schemes, there were no investment structures available for short-term plantations, much less sawlogs that took decades to mature.
”If we can’t get it in for short rotation, how can we get it in for long rotation? That’s our current dilemma.”
The planting drop compounds Australia’s $2.1 billion trade deficit in wood products, with no sign of an increase on the horizon.
A highly placed industry source, who asked that his name not be published, said one of Victoria’s largest remaining growers, Elders Forestry, would replant only 5000 hectares when it harvests 35,000 hectares in Victoria over the next 12 to 18 months.
Elders Forestry general manager Don Murchland said it was too early to say whether there would be enough investment to replant the land. ”Whatever decisions we make on replanting will be primarily driven by the demand either from retail or other investors.”
He said it was usually more economical to replant land than to plant it for the first time.
The investment regulator, Australian Securities and Investments Commission, has called for submissions on MIS reform by November 15, with a review to be released next year in an attempt to salvage the model.
VAFI said that the federal government needed to build or run long-term sawlog plantations or create market incentives such as carbon incentives for harvestable timber plantations and limits on the increase in water prices.
Mr Ragg believes alternative investment schemes are needed, such as subsidies to help farmers plant trees on their land.
”Don’t panic. We need to take a deep breath, think about other ways to do this. But it can be done.”
About 750,000 hectares of native timber is available to industry, with about 5500 hectares harvested annually.
